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While there is a decent amount of literature available for investor consumption on the topic of iGaming, we thought some cliff notes on the topic could be helpful.  Look for more detailed notes in the near future.

We think some form of legalized internet gaming in the United States is inevitable.  While it will likely be a couple of years before it's commercial, investors could begin to discount this potentially large opportunity so we are going to start talking about it.  Poker is where it will all likely start (or should I say resume).  Given its critical mass of players, PartyPoker seems to have a competitive advantage in reentering the US.  For the "brick and mortar" guys, Harrah's with its World Series of Poker seems best able to capitalize.  We will have more on these topics in upcoming posts. 

Here are the cliff notes:

Why is iGaming interesting?

  • Aside from Macau and Singapore, iGaming is one of the few subsectors in gaming that’s actually been growing. According to H2GC, the online gaming market has grown at a 23% CAGR from 2001-2008 to an estimated size of $22BN in 2008 and expected to reach $34BN by 2012.  In 2008, internet gaming accounted for 7% of the global gaming market.

What are the forms of iGaming?

  • In 2008, sports betting comprised the largest slice of the iGaming market with $10BN of revenues, followed by casino online gaming, poker and lastly bingo

iGAMING: "CLIFF NOTES" - igaming1

What are the biggest iGaming markets?

  • Even though internet gaming is illegal, US is still the single largest gaming market, estimated at roughly $6BN in size today
  • Regionally, Europe is the largest iGaming market, followed by Asia and North America

iGAMING: "CLIFF NOTES" - igaming2

Who are the players in the space?

  • Some of the public market igaming players include:
    • Partygaming/Bwin
    • Sportingbet
    • 888
    • Unibet
    • Playtech
    • Betsson
  • There are also a host of private companies, like Betfair (seeking IPO), Full Tilt Poker and PokerStars

iGAMING: "CLIFF NOTES" - igaming3